Yahoo Finance SM Energy Company Annual Results: Here's What Analysts Are Forecasting For Next Year
SM Energy Company (NYSE:SM) shares fell 2.5% to US$8.85 in the week since its latest full-year results. Revenues of US$1.6b arrived in line with expectations, although statutory losses per share were US$1.66, an impressive 114% smaller than what broker models predicted. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
View our latest analysis for SM Energy
Taking into account the latest results, the current consensus from SM Energy's eleven analysts is for revenues of US$1.67b in 2020, which would reflect an okay 4.9% increase on its sales over the past 12 months. Per-share statutory losses are expected to explode, reaching US$0.23 per share. In the lead-up to this report, analysts had been modelling revenues of US$1.67b and earnings per share (EPS) of US$0.049 in 2020. While analysts have made no real change to their revenue estimates, we can see that the consensus is now modelling a loss next year - a clear dip in sentiment compared to previous forecasts for a profit.
As a result, there was no major change to the consensus price target of US$13.80, with analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic SM Energy analyst has a price target of US$21.00 per share, while the most pessimistic values it at US$9.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the SM Energy's past performance and to peers in the same market. For example, we noticed that SM Energy's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 4.9%, well above its historical decline of 5.9% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.4% per year. So it looks like SM Energy is expected to grow at about the same rate as the wider market.
The Bottom Line
The biggest low-light for us was that the forecasts for SM Energy dropped from profits to a loss next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. The consensus price target held steady at US$13.80, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for SM Energy going out to 2024, and you can see them free on our platform here..
You can also see whether SM Energy is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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